Mastery Problem

Hurst Company's beginning inventory and purchases during the fiscal year ended December 31, 20-2, are shown.

UnitsUnit PriceTotal CostJanuary 1, 20-2Beginning inventory1,500$10.00$15,000January 121st purchase50011.505,750February 282nd purchase60014.508,700June 293rd purchase1,20015.0018,000August 314th purchase80016.5013,200October 295th purchase30018.005,400November 306th purchase70018.5012,950December 217th purchase40020.008,0006,000$87,000There are 1,200 units of inventory on hand on December 31, 20-2.

Required:

1.Calculate the total amount to be assigned to the cost of goods sold for 20-2 and ending inventory on December 31 under each of the following periodic inventory methods:

Cost of Goods SoldCost of Ending Inventorya.FIFO$$b.LIFO$$c.Weighted-average (round calculations to two decimal places)$$

2.Assume that the market price per unit (cost to replace) of Hurst's inventory on December 31 was $18. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:

a.FIFO lower-of-cost-or-market$b.Weighted-average lower-of-cost-or-market$

3.In addition to taking a physical inventory on December 31, Hurst decides to estimate the ending inventory and cost of goods sold. During the fiscal year ended December 31, 20-2, net sales of $100,000 were made at a normal gross profit rate of 35%. Use the gross profit method to estimate the cost of goods sold for the fiscal year ended December 31 and the inventory on December 31.

Cost of goods sold $

Estimated inventory $